The coronavirus pandemic has closed schools, shuttered restaurants, emptied office buildings, put Prime Minister Boris Johnson in intensive care and forced much of the UK economy into cryogenic suspension. So far, though, it hasn’t derailed Brexit.
Fronting the daily UK press conference Tuesday, Chancellor of the Exchequer Rishi Sunak affirmed that the government was committed to its current timetable for trade talks with the European Union, which resume Wednesday. In a photo tweeted by the EU’s chief negotiator, Michel Barnier, only the empty chairs between his team were a clue that something has changed in the non-Brexit world. Talks on the future trading relationship were paused when the virus hit both negotiating sides. They’re restarting in the same way that most of us are conducting our professional lives: remotely.
It all seems like a hazy dream from another life now, but the UK officially left the EU at the end of January, and entered a period of transition where it still enjoys full access to the European single market until the end of this year. Under the terms of the divorce deal, Britain can request a one-time extension of the transition period for one or two years, provided it makes the request by the start of July. If there were ever an excuse for triggering that extension, a once-in-a-century public health and economic crisis would seem to be it.
The International Monetary Fund predicts a 6.5% drop in Britain’s gross domestic product this year (and a 7% drop in GDP per head). The UK’s independent Office of Budget Responsibility is even gloomier, saying that the economy could shrink by 35% in the second quarter and by 13% for 2020. Even if the impact of Brexit is tiny in comparison to the virus shock, adding to this kind of misery seems cruel.
“This is not an argument about leaving the EU. That is done and dusted,” Robert Keen, the head of the British International Freight Association, said recently. “This is an argument about managing the transition process when not just the goalposts but the entire playing field has moved.”
As well as the impact on business, there’s the question of whether a government that’s consumed by the coronavirus response really has the capacity to successfully renegotiate Britain’s most important trading relationship in the space of a few months. There are thorny questions over fisheries that are a long way from being resolved, and difficult issues around transport, data sharing, the recognition of professional qualifications, technical barriers to trade, financial services and so-called “level playing field” demands from the EU (requiring that British regulations and standards stay aligned with those of Europe). Of five scheduled negotiating rounds before a major meeting between the opposing sides in June, two had to be cancelled because of the virus.
Even if a deal were struck, there would be serious doubts about implementation. Could Britain really be ready in January to roll out enhanced border procedures, a new immigration system and a complex customs and border arrangement to keep the border open between Northern Ireland and Ireland? These would be huge challenges in the best of times. And Britain is among the countries worst hit by Covid-19. That suggests its lockdown will probably be lifted in phases, with some social distancing measures maintained and part of the economy left shackled.
Yet Johnson is likely to stay the Brexit course, as there’s nothing particular to stop him. He has an unassailable parliamentary majority, and like incumbents pretty much everywhere dealing with this crisis, his popularity has shot up; more so after his recent hospitalization. If there’s ever a time to make a decision that’s not universally popular, it’s probably now.
Johnson had already moved his Conservative Party in a different direction since becoming prime minister, focusing on his message of “leveling up” left-behind working class communities, rebuilding trust and seeking to move beyond Brexit. With the coronavirus raging, he’s now a wartime leader of sorts. He doesn’t want bitter and divisive debates about why the UK will have to keep paying into the EU budget (as it would during an extension) just as the country is trying to recover.
Bloomberg
